$200m MkCap / 30c, page-52

Other stem cell companies don't have caveats on the "massive IP portfolio" by Debt vultures who will do anything and everything to ensure they don't lose money.

Mesoblast have approximately 12 months of cash left and it will take much longer than 12 months to design, setup, recruit patients and ultimately obtain results from a clinical trial in SR-aGvHD.

The best case scenario is that the company will raise around $50-75M (USD) to create a long enough of a cash runway. The problem is that who in their right mind is going to tip money into a company with a management team which has treated the FDA with contempt by ignoring their original advice regarding the need for an additional RCT 3 years ago? So even in the best case scenario, the raising will be at a significant discount to the closing price, so existing shareholders are likely to get diluted into oblivion.

However, there are real issues around the covenants in the Oaktree loan. What we do know from the 2022 annual report (page 87) is that Oaktree requires Mesoblast "to maintain a minimum cash balance in the United States of $35.0 million." Therefore there is really only 6 months of cash left before the company needs to raise capital. What is more concerning is the extension of the additional $30M of financing by Oaktree announced 23 December 2022, which was granted "subject to achieving certain milestones on or before September 30, 2023." No one knows for sure what the milestones were, but one would guess it would be approval of REM-L in paediatric gvhd. That's not happening, so then the issue becomes whether failing to meet the milestones means the company no longer has access to just the $30M, or to the whole $90M? Given the negligence with which SI and the management team conducted the BLA resubmission, there is every chance that Oaktree was able to include non-financial covenants in the loan restructuring. If I were a shareholder, this is something I would want answered, ASAP.